Facebook-owned Instagram announced on Wednesday it will start showing advertisements on its IGTV video app and will split the revenue from those ads with influencers who create videos for the service.
The move adds yet another channel where Facebook can show ads to its nearly 3 billion monthly active users and increases the amount of revenue Instagram contributes to Facebook's advertising business. In 2019, Instagram generated approximately $20 billion in advertisements, which was more than 25% of Facebook's overall revenue, according to Bloomberg.
Instagram will share at least 55% of the revenue from these ads with creators, which should spur more influencers to create material for IGTV. This business model has proven to be a hit for other platforms, most notably Google-owned YouTube.
"We're committed to making IGTV an effective and brand-safe space for advertising, so that we can help creators make money and connect people with great products," the company said in a blog post.
Facebook launched IGTV in June 2018 as a spinoff of Instagram where users can watch longer videos made for mobile devices. Users can access IGTV videos directly through Instagram or the stand-alone IGTV app.
The ads will begin showing up next week, and will be no longer than 15 seconds, Instagram said. The company will experiment with formatting details, such as whether it will allow users to skip the ads.
The company will limit the rollout at first to a few advertisers and influencers in the United States. Instagram did not specify how exactly revenue will be split with influencers.
Instagram also announced that it will test allowing users to buy virtual "badges" during influencers' livestreams as a way to show support. (Amazon's live game-streaming service, Twitch, already has a similar feature.)
For instance, a badge might appear as a small heart symbol next to a person's name. That person's comments will show up more prominently, and influencers will see a list of all badge holders who have donated to them. Badges will cost 99 cents, $1.99 or $4.99, and initially all the money will go to the influencer.
The company will roll out the badge test in June with a small group of influencers and businesses in the U.S. before expanding it to Mexico, the U.K. and other countries in coming months.